The iPath Dow Jones-UBS Natural Gas ETN (NYSEArca: GAZ) is getting some unwanted attention after the wipeout in VelocityShares Daily 2x VIX Short-Term ETN (NYSEArca: TVIX) because the natural gas exchange traded note trades at a premium.
TVIX was down an additional 20% Friday after the previous session’s roughly 30% plunge as the ETN’s big premium to indicative value collapsed. The fund’s premium surged as high as 90% earlier this week. [What Really Happened with TVIX]
The natural gas ETN, GAZ, is also trading at a premium – about 46% to indicative value on Friday morning. [Why the Natural Gas ETN is Trading at a Huge Premium]
GAZ was down 6% even though natural gas futures gained ground. U.S. Natural Gas Fund (NYSEArca: UNG) rose about 2%.
The divergence suggests the GAZ premium was falling Friday.
TVIX and GAZ traded at premiums because their issuers, Credit Suisse and Barclays, respectively, halted share creation.